Question

Reggie puts $9,866.00 into an account to use for school expenses. The account earns 7.01% interest, compounded quarterly. How much will be in the account after 9 years?
Use the formula A=P1+
r
n
nt, where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.

Answer 1

A = P(1 + r/n)^{nt} = 9866(1 + 0.0701/4)^{4·9} = 9866(1.017525)^{36} ≈ 9866(1.8690667) ≈ $18,440.21.

So after 9 years there will be approximately $18,440.21 in the account.